Siemens 2012 Annual Report Download - page 300

1 A. To our Shareholders 49 C. Combined Management Report 21 B. Corporate Governance

on a monthly basis over a period of twelve months. The shares
are purchased at market price at a predetermined date once a
month. The Managing Board of the Company will decide annu-
ally, whether shares acquired under the Monthly Investment
Plan (investment shares) may be transferred to the Share
Matching Plan the following year. If the Managing Board de-
cides that shares acquired under the Monthly Investment Plan
are transferred to the Share Matching Plan, plan participants
will receive the right to matching shares under the same con-
ditions applying to the Share Matching Plan described above.
Each fiscal year the Managing Board decides, whether or not to
issue a new tranche under the Monthly Investment Plan.
The Managing Board decided that shares acquired under the
tranches issued in fiscal  are transferred to the Share
Matching Plan as of February  and February , respec-
tively.
. Base Share Program
In fiscal  and , the Company issued an annual tranche
under the Base Share Program. Employees of Siemens AG and
participating domestic Siemens companies can invest a fixed
amount of their compensation into Siemens shares, sponsored
by Siemens with a tax beneficial allowance; in fiscal , mem-
bers of the Managing Board, for the last time, could participate
in the Base Share Program. The shares are bought at market
price at a predetermined date in the second quarter and grant
the right to receive matching shares under the same conditions
applying to the Share Matching Plan described above. Each fis-
cal year, the Managing Board decides whether or not to issue a
new tranche under the Base Share Program. The fair value of
the base share program equals the amount of the tax beneficial
allowance sponsored by Siemens. In fiscal  and , the
Company incurred pretax expense from continuing operations
of € million and € million, respectively.
. Resulting Matching Shares
Year ended September ,
 
Entitlements to
Matching Shares
Entitlements to
Matching Shares
Outstanding, beginning of period 1,977,091 1,614,729
Granted  706,354 579,845
Vested and transferred (1,037,292) –
Forfeited (57,596) (80,258)
Settled (42,975) (137,225)
Outstanding, end of period 1,545,582 1,977,091
1 Thereof – and , to the Managing Board in fiscal  and , respectively.
Fair value was determined as the market price of Siemens
shares less the present value of expected dividends during the
vesting period as matching shares do not carry dividend rights
during the vesting period. Non-vesting conditions, i.e. the
condition neither to transfer, sell, pledge nor otherwise en-
cumber the underlying shares, were considered in determin-
ing the fair values. Depending on the grant dates, the fair val-
ues are €. and €. per matching share entitled in fiscal
; in fiscal , the grant-date fair values are €. and
€. per matching share entitled. In fiscal  and , the
weighted average grant-date fair value of the resulting match-
ing shares is €. and €. per share respectively, based
on the number of instruments granted.
  
Under the Jubilee Share Program, eligible employees of
Siemens AG and participating domestic Siemens companies
receive jubilee shares after having been continuously em-
ployed by the Company for  and  years (vesting period),
respectively. Generally, settlement of jubilee grants is in
shares. Jubilee shares are measured at fair value considering
biometrical factors. The fair value is determined as the market
price of Siemens shares at grant date less the present value of
dividends expected to be paid during the vesting period for
which the employees are not entitled to. The weighted average
fair value of each jubilee share granted in fiscal  for the
th and the th anniversary is €. and €., respective-
ly, based on the number of shares granted. The weighted aver-
age fair value of each jubilee share granted adjusted by bio-
metrical factors (considering fluctuation) is €. and €.,
respectively, in fiscal . The weighted average fair value of
each jubilee share granted in fiscal  for the th and the
th anniversary is €. and €., respectively, based on
the number of shares granted. The weighted average fair value
of each jubilee share granted adjusted by biometrical factors
(considering fluctuation) is €. and €., respectively, in
fiscal .
In fiscal  and , . million and . million jubilee
shares were granted; . million and . million were trans-
ferred, . million and . million forfeited, resulting in an
outstanding balance of . million and . million jubilee
shares as of September ,  and . Considering biomet-
rical factors, . million and . million jubilee shares are ex-
pected to vest as of September ,  and .
    
In December , the authority to grant stock options
expired. The option grants were subject to a two-year vesting
period, after which they could be exercised for a period of up